In the grand scheme of a lifelong career, 5 years seems like a drop in the bucket. Yet, this was a milestone that I not only looked forward to, but set as a personal goal. Why? Because of a looming statistic I was informed of early on: 85% of licensed agents get out of the real estate business before 5 years are up. Beyond that, another 85% of people in Ohio who take pre-licensing classes never actually go on to get licensed.
In this world of HGTV reality, the business has become very attractive to a good number of people. In fact, there are approximately 3000 agents in the Dayton MLS alone, but it’s safe to say that a small fraction of that number actually do the majority of sales. I had my own litmus test in finding successful Realtors to work with when I was in the midst of my 20 year career as a loan officer: find their why.
There was a vast difference in the professional trajectory between a person who wanted to be a Realtor because it was “flexible”, “part time work”, and “easy money” and the people who got into the field simply because they love the business and can’t imagine doing anything else career wise except being part of the home buying and selling process. Excitement and enthusiasm for field is imperative to a successful career. In short, if Real Estate isn’t an itch that must be scratched for you, then the odds are already against you.
So, you have the itch, it needs to be scratched. Great start — now what? There are a few basic tools that can definitely help any new Realtor starting out in the business.
FIND YOUR NICHE
You are now competing with thousands of others in your market. Differentiating yourself is essential for survival and growth. For me, I started this leg of my career journey at a property management company. I learned the ins and outs of leasing, problems that occur and had my first exposure to investment real estate — which is the exact niche that gave my business partner, Jonathan, his leg up in the Realty world. We went on to own investment properties together, which greatly helps both of us to relate to potential clients. Not only can we help other investors, but we can also help that couple buying their first home in spotting issues beyond the aesthetics that they may not think to look for.
Spend some time finding your niche. What do you know better than the average Realtor? What value can you add that goes above and beyond expectations? Maybe it’s staging and decorating. Perhaps it’s a specific area or neighborhood you live or work in and know better than anyone else. It could be new construction, or a passion for renovation and rehab. Don’t forget that demographics can be a niche, as you could focus on baby boomers downsizing or first time homebuyers… the list is endless. But define your niche and excel in that role. No need dabble in as many areas as possible, but rather by focusing and becoming proficient in a specific area, you will naturally evolve into related areas.
THE POWER OF NETWORK
From your niche, it is time to build your network. For us, we learned early on that you simply can’t be an expert in investment Real Estate without a network of contractors, commercial lenders, title companies etc. You can’t know everything! It is essential to have a team of trustworthy experts surrounding you to support you. Think about the vast number of people with various talents that go into the different arms of the Realty world: lawyers, plumbers, electricians, contractors, cpa’s…… the people who fill these roles can change and evolve with you as business grows for you and for them
Quite frankly, network is everything. Its a dynamic relationship built and tested over time and projects. You will find that these aren’t just service partners, but rather people you end up doing life with! Partnering with the right people and having mutual respect will result in a beneficial relationship for both you and the people in your network. It leads to loyalty and prioritization. You should always be mindful of how your benefiting your partners.
A big part of your network is the people you associate with in your brokerage. In Ohio, you are required to work under a broker. Personally, I started with a large, National franchise as I believed a well known broker name would offer some legitimacy to me just starting out in the business. The training I received taught me how to sell the company, and also consisted of in house lenders, title companies and home warranty companies all giving their best sales pitch.
The issue with this is that the training was in no way niche based. It is impossible for a large company to train you in your personal niche because it is more of a one size fits all type training.
Another important note is that the chasm in cost structure across brokerages is vast, and something to be very mindful of when contemplating who you align yourself with. A commission split of 35-50% is actually very normal for large brokerages. Others charge a transaction fee of a flat monthly fee. Willis and Rife charge agents a flat $295 fee per transaction. In fact we recently had an agent receive a $10,000 commission check that he only had to give our brokerage $295 of, whereas at his previous brokerage, he would have handed them 50% of his take home pay. It only makes sense to do your homework on these options, and find a company that minimizes your cost.
Beware of hidden costs. Some brokerages upcharge for things like signs and lock boxes — watch for it. As a new agent, you are a target for what we call the “good idea fairy”. People will want to sell you all sorts of things. One such thing is leads, and while a good lead can be worked and are legitimate, analyze the cost benefit. We would advise to avoid costly software programs or CRM’s, as they are unnecessary and at times even lead to clients receiving marketing from a company even after you have left it. Also refrain from paying big bucks for newsletters that most people will never even read. Be wary of long term contracts. Analyze every dollar you spend. If it doesn’t make money or drive traffic, avoid it.
BRAND YOURSELF, NOT A COMPANY
The solution we arrive to, is that every Real Estate Agent who is truly serious about their craft should aspire to become a broker. In Ohio, you need the equivalent of an Associate’s Degree to start the process. Hondros offers courses for about $3,000. Once the educational requirements are satisfied, you will need to take a test that is very similar to the licensing test that made you a Realtor in the first place. While insurance and office space are necessities, they are more affordable than you may think. We have gladly and proudly supported agents within our company in this type of endeavor.
It all goes full circle. Your niche will lead you to growing your network which will lead to a built in support system for a potential brokerage. It may sound simple, but the best and most successful systems truly are. Keep relationships legitimate and real and in doing, so, business will flow from them.
Something that we take pleasure in doing is taking people we have met and worked with out for coffee, or to happy hour — even taco tuesday. By reaching into our contact list and touching base with people who are important to us, we nurture very real relationships with people. We have found that most of what we do, comes from relationships that are real. I would encourage you to get eye to eye with your centers of influence and see how easily personal conversations can turn into mutually beneficial business opportunities with people you trust.
It comes down to the motto we have built our business on… We are a couple of guys, not gurus, and we practice systems, not schemes.